Feds ask for restitution for ASG in Rudin fraud case

“…punish him to the fullest extend of the law,” give $3Mil back to AS, AG Talauega says
fili@samoanews.com

American Samoa Government could receive more than $3 million in restitution from Native Hawaiian Holding Corporation (NHHC) official, Quin Ngoc Rudin, whose “selfishness and greed has a negative” and lasting impact on ASG and the people of American Samoa, according to court documents filed by the US government at a federal court in California.

ASG awarded NHHC a multi-million dollar contract funded by the federal National Emergency Grant (NEG) program following the 2009 earthquake and tsunami. It was Rudin who signed the contract on behalf of NHHC, while then Human Resources Department director Evelyn Vaitautolu Langford, who was also the Governor’s Authorized Representative, signed for ASG.

Rudin’s case before US District Court Judge John S. Tigar, stems from a federal indictment in 2013 in which the federal government accused him of defrauding Cisco Systems Inc. and its subsidiary Cisco Systems Capital Corporation and Altura Pharmaceuticals, Inc. — through his own company called CGC Digital.

Rudin is scheduled for sentencing on Sept. 30, the day after American Samoa marks the 7th anniversary of the September 2009 tsunami, which claimed the lives of 34 local resident.

Yesterday the US Attorney’s Office filed with the court, the federal prosecutor’s sentencing memorandum, which includes a Sept. 19th “Victim Impact Statement from American Samoa Government” signed by Attorney General Talauega Eleasalo Alo, who said, “It is in the public’s best interest for the Court to make an example of Mr. Rudin and punish him to the fullest extend of the law.”

Talauega informed the court that the NEG funds were intended to pay for both short term and long-term initiatives to promote employment and development of the workforce following the 2009 tsunami. And Rudin entered the territory as a result of the opportunities provided by these initiatives.

“His purpose, however, was to enrich himself at the expense of the people of American Samoa with no regard for the much needed services NEG was suppose to support,” Talauega wrote. “The maliciousness and predatory nature of Mr. Rudin’s scam extends beyond stunting the recovery and development process after the tsunami.”

He points out that grants have been an important source of funding for American Samoa and Rudin’s “misuse and abuse of the NEG funds only further complicate our ability to finance important services.”

Due to Rudin’s criminal action, American Samoa has been left without the promise of potential jobs, workforce training; call center and over $3.13 million allocated for those purposes.

And also due to Rudin’s “criminal activity,” Talauega said, American Samoa was penalized by the US Labor Department to pay back approximately $2.5 million of NEG funds and ASG was forced to expend thousands of dollars to hire a firm to defend itself against this penalty.

“Mr. Rudin’s crimes were not victimless in any sense of the word. His selfishness and greed has a negative, harmful and long lasting impact on the American Samoa Government and the people of American Samoa, especially given the purpose of the monies he stole,” Talauega declared.

“He (Rudin) stole from the less fortunate. He stole from people who were trying to rebuild their lives, after a devastating tsunami. He stole from the poor and needy, the lowest of our society,” Talauega added.

SENTENCING STATEMENT

In its sentencing statement, the US government said the Court is acquainted with the scheme to defraud involving American Samoa — referring to the US government’s case against Langford, who pleaded guilty to Wire Fraud and Bribery Concerning Programs Receiving Federal Funds based on her receipt of payments from companies associated with Rudin totaling approximately $250,000.

These payments grew out of Rudin’s involvement with NHHC, which had entered into a contract with the ASG to provide services pursuant to the NEG monies awarded to the territory following the tsunami.

“In truth, NHHC had virtually no ability to implement the job training services for which it was hired,” said prosecutors, who added that NHHC received payments from ASG totaling $3.13 million.

Prosecutors requested that the court order Rudin to pay restitution to the parties, including ASG, which he defrauded.

According to court documents, federal prosecutors calculate the total restitution for Rudin to pay to the five victims — including ASG — of his scheme comes to nearly $40 million.

Prosecutors also revealed in its statement that Rudin had purchase a “ridiculous” Gulfstream jet, and the federal government has “learned that each trip that the jet took to American Samoa — and there were several — required the purchase of tens of thousands of dollars of fuel.”

Besides the millions of dollars for Rudin to pay in restitution, prosecutors recommend that the court sentence the defendant to 84 months in prison, followed by three years of supervised release.

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